Survival skills in financial services : strategies for turbulent times

258 Pages·2002·1.03 MB·English

by  Julian Lowenthal

J.K. LASSER PRO™
SURVIVAL SKILLS IN
FINANCIAL SERVICES
Strategies for Turbulent Times
Julian Lowenthal
John Wiley & Sons, Inc.
For Susan,
whose courage, insight and support inspire me
every day and for Steven, a joy today and a vision
of the wonderful things yet to come.
Copyright ©2002 by Julian Lowenthal. All rights reserved.
Published by John Wiley & Sons, Inc., New York.
Published simultaneously in Canada.
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ISBN: 0-471-21880-4
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10 9 8 7 6 5 4 3 2 1
Acknowledgments
This book would not have been possible without the help of a wide net-
work of colleagues, family and friends. Many thanks to the industry pro-
fessionals who gave their time for interviews and who selflessly shared
their insights. Their words, both on and off “the record” form the heart
and soul of the book.
A special thanks to Keith Darcy, a long-time friend and mentor who
was the original instigator of this project. Thank you to Susan Davis, who
reviewed and edited drafts of the manuscripts and provided guidance on
the importance of being pithy. I also want to thank Arline Lowenthal for
taking on the tedious job of transcribing the bulk of the interviews.
Finally, thanks to David Pugh at John Wiley and Sons, Inc. for putting
up with me, Hy Turner, my role model for perseverance in the literary
world, and Jacqueline Philpotts for pointing me in the right direction
early on in the project.
V
The camera, the tape recorder . . . misused, well-used. There are the
paparazzi; and there is Walker Evans. The portable tape recorder, too, is
for better or for worse. It can be, tiny and well-concealed, a means of
blackmail, an instrument of the police state or, as most often is the case,
a transmitter of the banal. Yet a tape recorder, with microphone in hand,
on the table or the arm of the chair or on the grass, can transform both
the visitor and the host. On one occasion, during the play-back, my com-
panion murmured in wonder, “I never realized I felt that way.” And I was
filled with wonder, too.
Studs Terkel
Working
1972
Contents
Introduction: Setting the Stage xi
Cast of Characters xvii
Part One The Situation Room 1
CHAPTER1 I Don’t Think We’re on Wall Street Anymore 3
CHAPTER2 Now You See It,Now You ... 19
CHAPTER3 We the People 47
Part Two Survival Manual 63
CHAPTER4 Oh No,Not I—The Five By Five 65
CHAPTER5 Top of the Charts 71
CHAPTER6 You Can’t Handle the Truth! 93
CHAPTER7 Officer Candidate School 101
Part Three Pressure Points 131
CHAPTER8 Goodbye Mr.Chips 133
CHAPTER9 Road Trip 145
CHAPTER10 “The Biggest Thing Is That People Aren’t Stupid Anymore” 157
CHAPTER11 Sometimes You Just Have to Say,What the ...? 169
CHAPTER12 How Did I Get Here? 181
CHAPTER13 There Is No Need to Change—Survival Is Not Mandatory 191
Conclusions: Curtain Call 195
Appendix 1 Terms You Should Know 203
Appendix 2 FSI Skills Guide 231
Index 245
IX
Introduction
Setting the Stage
Why Now?
C
hange. It is spinning all around us. You read about “changing
times” in the press, you hear about “changing technology” on the
radio. All economic, social, political, and technological systems are
undergoing unprecedented periods of change. How many times have you
heard the saying “The only constant is change”?
The financial services industry (FSI) is no exception. In fact, you could
make the case that the FSI is one of the most rapidly changing sectors in
today’s global marketplace. Every day, it seems, there is another breaking
story:
■ MegaSecurities launches its new Internet strategy . . .
■ MondoBank acquires the retail branches of a Latin American financial
conglomerate . . .
■ SureThing Insurance announces plans to demutualize . . .
As a consultant to financial services institutions, I have followed these sto-
ries with great interest. I had to—these are my clients. But as I studied these
events and incorporated these developments into my work, I realized that
there was something missing. Where were the people? Nobody was talking
about the people. This struck me as odd because “institutions” don’t gener-
ate new business, meet customer needs, design and implement systems,
XI
XII INTRODUCTION
manage a professional staff, or provide essential support functions—people
do. People are the foundation of this business. But when I realized that
nobody was talking about the impact of these change forces on the profes-
sionals at work, I knew I had a mission—and Survival Skills in Financial
Serviceswas born.
What Is Survival Skills in Financial Services?
Let me start out by explaining what the book is not. It’s not:
■ The latest installment in the reality TV craze (although I’m open to
offers)—it is critical information you can use to be SUCCESSFUL.
■ About whether we are in a bull or a bear market or whether we are in
a recession or a recovery—it’s about CHANGE.
■ About financial institutions—it is about PEOPLE.
When I began the book, I set out to answer the following questions:
1. What are the key change forces affecting the financial services
industry?
2. What are the effects, or what I like to call the pressure points, of
these forces on professionals working in the industry?
3. What are the key knowledge areas, skills, and abilities that finan-
cial professionals at all levels need to succeed in this dynamic
industry?
The answer to the first question was not that hard. Anyone who was not
hibernating over the last decade could pick out the key change forces. For
questions 2 and 3, I had some answers but not enough. I wanted to talk
to people in the industry to get their views and insights on these critical
topics. The result of my investigation is the book you are holding in your
hands (or paging through on your computer or listening to in your car or
. . . you get the idea). Survival Skills in Financial Servicesfocuses on:
■ How key forces like technology, globalization, a more knowledgeable
and sophisticated customer, and new developments in the risk and
regulatory environment are impacting people who work in financial
companies.
INTRODUCTION XIII
■ The knowledge, skills, and abilities that professionals need to acquire
and develop to succeed in these turbulent times.
■ Strategies and techniques that people who provide products and serv-
ices to the financial services industry can use to effectively sell their
offerings in a chaotic industry.
But the word Survival in the title of the book (you know that’s why
you’re reading this)—is the situation truly that serious? Throughout the
project, I have received a number of reactions to the title, including this:
That word, survival. I’m sure you were very careful in selecting that. In
and of itself, it’s the hook. Using that word—laying that against each of
those [change forces]—we can talk for hours about it. [Dennis
Buchert]
And I did talk for hours with many industry professionals who were gen-
erous enough to devote their time and efforts to help you succeed.
Who Should Read This Book?
Everyone. Really. I feel that everyone would benefit by reading this book.
However, the book is targeted at three main groups of people, whom I
label Insiders, Providers, and Observers.
Insiders:Professionals Who Work in the FSI
If you are an Insider—someone who works in a large, medium-sized, or
small financial services firm, or even in a one-person shop—you will ben-
efit from this book. It will give you insights into the changes affecting the
industry and guide you through the steps you should take to be success-
ful in these turbulent times. And an added benefit to you is that this
information is not coming solely from some so-called expert who got a
book deal. You will be hearing it straight from experienced, successful
industry leaders.
Providers:Professionals Who Sell to the Industry
Financial institutions buy a wide range of products and services from out-
side vendors. Sales professionals, however, do not sell to institutions—
XIV INTRODUCTION
they sell to people. If you are a Provider, Survival Skills in Financial
Services will give you valuable insights into the issues that are affecting
your customers on a day-to-day basis. It also includes specific tips on how
to position your products and services as they relate to the change forces
at play in the market. You can use these tools to create focused value
propositions that will improve your sales efforts to the industry.
Observers:On the Outside Looking In
This book will also be useful to people who want an inside look at the cur-
rent state of the industry. Students, journalists, social critics, talk show
hosts, politicians, performance artists, and other interested parties will all
benefit from this analysis on the impact of change on FSI professionals.
Using Survival Skills in Financial Services
The book is divided into three parts. In Part One: The Situation Room,
you will learn about the current state of the industry and how we got
here. You will read about the five major change forces impacting the
industry:
■ Tech Effects—advances in technology and their impact on financial
services.
■ Global Mobilization—the globalization of world financial markets.
■ Cognizant Customers—the proliferation of sophisticated and knowl-
edgeable institutional and retail customers.
■ Shifting Risks—a dynamic risk environment that challenges traditional
assumptions and priorities.
■ Rewriting the Rules—changes in industry regulations and their impact
on market structure.
also discusses the particular challenges faced by all levels of industry pro-
fessionals, including:
■ Leaders—executive-level professionals with strategic and leadership
responsibilities who are accountable to all institutional stakeholders.
■ Managers—midlevel professionals who implement business objectives
through other people.
INTRODUCTION XV
■ Builders—professionals who are responsible for growing the business in
line with the institution’s strategic vision.
■ Producers—frontline professionals who implement the firm’s products
and services, and generate revenues.
■ Supporters—employees who support all levels of the institution and
serve as resource centers.
In Part Two: Survival Manual, you will find a framework for analyzing
the change forces and the impact on industry professionals, the top five
individual survival skills, a guide to the basic knowledge requirements for
people working in or selling to the industry as well as specific skill require-
ments for Leaders, Managers, Builders, Producers, and Supporters. Each
chapter focuses on the impact a particular change forces on professionals
at work. Each chapter follows a standard format:
■ An introduction to the topic to get you in the mood.
■ An analysis of the professionals that are most affected by the particu-
lar change force.
■ Knowledge requirements to overcome the challenges of Tech Effects,
Global Mobilization, Cognizant Customers . . . you get the idea.
■ Critical Survival Factors (CSFs)—What you need to be able to do to
make it through this mess.
■ Tips for Providers relative to the specific issues.
PartThree: Pressure Points, looks at the effects created by each of the
change forces and the knowledge, skills, and abilities required to succeed
in the face of these challenges. Throughout the book, Providers will find
strategies and sales techniques as they relate to the topics being considered.
There are many ways to use this book.
■ You can use this information to chart a personal success plan.
■ Managers can use this information to create a development plan for
their people.
■ Senior executives can use this information to identify human capital
needs to succeed in turbulent times.
■ Providers can use this as market intelligence to help them plot their
next move.